Let’s be honest. We’ve all had high dreams about Willy Wonka-like confections that we’d love to try ourselves. Or, now that edibles are legal, wish an edibles manufacturer would make. In 2023, the chance of that dream becoming a reality for everyday consumers, professionals, and cannabis admirers, is greater than ever, especially in California.
California is one of the most established, and advanced US cannabis markets, that offers unique market entry opportunities through specialized licensing. That means starting an edibles business in the state can take not only less time but also less capital.
Ready to put your money where your mouth is and eat up the chance to start an edible company? Then you’re in the right place! Keep reading for our first edition in our series on how to start an edibles business in California in the simplest and most seamless way possible.
Starting an Edibles Business – Step by Step
Let’s waste no time and get right into our step-by-step guide on starting an edibles business in California.
#1 – Research markets
Researching the market you’re about to enter is critical for any new product or business, but even more so with cannabis due to its fast-paced nature. For instance, in the past two years, we’ve seen a trend toward an increase in solventless cannabis goods. In addition, consumer preferences are trending toward consumables that don’t need to be inhaled because of health concerns or other problems.
For edibles specifically, vegan, gluten-free, and specialty goods, like fast-acting effects, are just on the cusp of rising in sales and should all be considered when you’re learning how to start an edibles business, especially in a health-conscious market like California.
#2 – Create a business, funding, and licensing plan
The next step is similar to starting any other type of business, outside of having to become licensed to manufacture and sell edibles. To learn more about what you’ll need in a business plan and for funding and licensing to start an edible company, check out our in-depth guide here.
As for funding, it’s important to note that because cannabis is still classified as a Schedule I drug federally, not all traditional lending options will be available. Luckily, as the industry has legitimized itself over the last decade, there are now more available loans and funding sources for starting a cannabusiness than ever before.
In regards to licensing, California is unique in offering a Type-S license that allows for contract cannabis manufacturing or shared manufacturing opportunities. Another streamlined market entry point is cannabis white-label or private-label goods, which has its benefits for new cannapreneurs, too.
#3 – Selecting ingredients
When you’re starting an edibles business, it’s likely that you have one, or a small collection of products, in mind based on your market research and business plan. The next step in making that a reality is selecting the ingredients that will best support that unique cannabis edible.
For example, is the goal of your business to make clean, organic gummies with locally-sourced California ingredients? Then you’ll need to find suppliers and research which ones are most cost-effective for your forecasted financials.
#4 – Formulating recipes and manufacturing
Now’s the fun part! Starting an edible company will require a lengthy R&D process that tests recipes for flavor, texture, dosage, and overall quality. In this process, you’ll seek out and purchase equipment and supplies while troubleshooting all the unique quirks in manufacturing to ensure the initial recipe is all smoothed out before heading to mass production.
#5 – Packaging and labeling
If you think it’s even more fun and games when you’re done manufacturing, you’d be wrong. Not only are there strict rules for getting a license and making edibles, but the packaging of the products is just as scrutinized. Here’s just a glimpse at some of the state’s Department of Cannabis Control (DCC) requirements, which we’ll go into more in-depth in the second part of our starting an edible company series –
Cannabis packaging must be –
- Resealable (if more than one serving)
- Opaque (if an edible cannabis product)
For labeling, there’s an even longer list of requirements that must all be adhered to before going to sale. Back to thinking about what kind of license will work best for your business: an experienced cannabis contract manufacturer can help with compliance in a way that saves time and effort and keeps your business from losing money because of mistakes.
#6 – Selling
The last step in starting an edibles company is selling the product you’ve worked so hard to manufacture. Of course, this is a step that’s easier said than done. Keep in mind that it’ll take a significant amount of legwork to contact retailers and purchasers to pitch and sell your products. This point highlights yet another benefit of partnering with a cannabis contract manufacturer, who often has ties or connections to local retail storefronts.
How to Vet Potential Cannabis Manufacturers in California
Cannabis enthusiasts are naturally creative, which is exactly why we need more of their minds in the growing edibles market. Even more, just as other retail industries are seeing trends towards consumers “shopping small” and supporting small businesses, the same goes for cannabis consumers. So, will you be the next start-up or budding cannapreneur that California is eager to support?
My Green Network helps make those creative dreams come true by supporting entrepreneurs who are starting an edible company. We’ve helped over 20 brands launch successfully into California’s market and are just getting started. Now that you know the basics of how to start an edibles business in California, take the next step by contacting our team for a facility tour or discovery call.
Come meet our team of edibles experts and explore our membership and licensing types. Learn more here, and stay tuned for more in our series on how to start an edibles business. Next topic? Compliance!